Schizophrenia (scz) is a major public health problem affecting ~1% of the American population with devastating consequences. Structural and functional deficits in the thalamus, a critical point of convergence for multiple cortical and subcortical circuits, have been consistently implicated in scz. The thalamus is composed of multiple nuclei, each with a different pattern of anatomical and functional connectivity. These nuclei have now been redefined based on anatomical connections to other brain regions. These regions are too small to be resolved by conventional (3T) fMRI, but can be resolved by ultra-high field (7T) fMRI. We therefore propose, In aim 1, to use resting BOLD signal at 7T to test the hypothesis that functional connectivity of thalamocortical circuitry in individuals with recent onst scz is disrupted compared to matched healthy controls (N =25 per group). Based on our preliminary data in individuals with chronic schizophrenia, we hypothesize that specific thalamic regions will show enhanced functional connectivity in recent onset scz. We predict that abnormal connectivity will be most evident in the thalamic subregions anatomically connected to prefrontal cortex, with parallel but less robust connectivity to other cortical regions. Secondaril, we predict that symptom severity and cognitive deficits will be correlated with the extent of abnormal connectivity. BOLD signal, however, is strongly modulated by neurovascular function. Therefore, in Aim 2 we will use 7T fMRI to determine regional whole brain and blood flow (CBF) using arterial spin labelling (ASL), and arteriolar cerebral blood volume (CBVa) using a new method developed by our group called inflow vascular space occupancy (iVASO) MRI. These measures will enable us to better interpret BOLD signals, and may also reveal abnormalities in blood flow or blood volume in schizophrenia. We predict that robust evidence of functional connectivity detected by BOLD will remain independently significant, but that marginal findings may be accounted for by blood flow and volume changes. Secondarily, we will test the hypotheses that CBF and CBVa are intrinsically abnormal in scz, both across the brain and specifically in the thalamus. If successful, our results will support larger, longitudinal studies f these parameters in scz and other psychiatric disorders.